December 15, 1999
Dr. Constance Newman
D.C. Financial Responsibility and
Management Assistance Authority
One Thomas Circle, NW
Washington, D.C. 20005
Dear Mrs. Newman:
It was good meeting with you the other day to discuss some of the problems facing the public charter schools. As you requested, we will be providing you with a memorandum discussing our main issues and concerns before the end of the year.
One of the problems we mentioned to you during our meeting, however, cannot wait for solution until the new year. That is the pupil count audit and its implications for charter school funding.
We understand the Control Board's desire to make sure that none of the set-aside is paid out inappropriately. We believe, however, that there is no legal justification for having delayed funding the schools until completion of the audit by Thompson Cobb Bazilio & Associates. We also believe that requiring the public charter schools to obtain 3 proofs of residency from each student is not legally justifiable and fails to take into account the needs of special populations served by many of the public charter schools. It is also manifestly unfair, since DCPS is permitted to verify residency through alternative means not available to public charter schools. [1]
The Audit
The FY 2000 appropriations bill recently signed into law requires that 5% of the DCPS budget be set aside “until the current student count for Public and Charter schools has been completed,” at which time the money is to be apportioned between the public charter schools and DCPS based on their respective student populations. There is nothing in the appropriations act specifying how the “count” is to be done, but guidance is provided by sections of two other laws. These laws make it clear that the audit is in no way intended to hold up disbursement of funds to the public charter schools.
The first is the Uniform Per Student Funding Formula for Public Schools and Public Charter Schools and Tax Conformity Clarification Amendment Act of 1998 [“Funding Act”]. Under ¤107 of the Funding Act, DCPS is to be funded for the current fiscal year based on the number of students it had on October 1 of the previous school year. DCPS's October 1 count is to be audited by an independent contractor, “who shall perform a census on the student enrollment of the DCPS.” The auditor's count is to be transmitted to the Mayor, Council, and the Control Board no later than the following January 1. If the January deadline passes, the Chair of the Education Committee of the Council is to instruct the DC Auditor to determine the resident enrollment of DCPS “based on the best evidence available.” The auditor's count is to be used to determine DCPS's annual appropriation for the next school year.
Charter schools are not mentioned in ¤107. It seems likely, therefore, that the intent behind the audit requirement of the Funding Act was to make sure that DCPS, which had a history of inflating its student count, did not get paid for more students than were actually enrolled. It is also clear that the audit was not intended to affect funding in the current school year.
The DC School Reform Act of 1996 [“Reform Act”] also requires a pupil count audit. Three sections of the Reform Act, read together, make it quite clear that the audit requirement is not meant to delay funding of the schools.
Under ¤2401 of the Reform Act, DCPS Schools and PCS's are to be paid a uniform dollar amount for the number of students calculated under ¤2402.
Section 2402 of the Reform Act mandates that by September 15 of each year each DCPS school [2] and each PCS must submit a report to the Mayor and the BOE indicating the number of students enrolled in each grade, in preschool and prekindergarten, and in adult education.
The BOE is required to make arrangements with the Control Board for an independent audit of these counts. The auditor is to give his opinion as to the accuracy of the numbers. He also is to identify any “material weaknesses” in the way the counts were done.
Not later than 45 days after October 15 [November 29] the Control Board is to submit the audit to the BOE, the Mayor, the Council, and appropriate congressional committees.
Finally, ¤2403 of the Reform Act requires that 75% of the amount calculated under ¤2401 be paid to the public charter schools not later than October 15 of each year, more than a month before the final day for submission of the audit report.
Read together, these sections make clear that the Reform Act contemplates a process audit designed to identify problems so that they can be corrected before the next year's count; there is no intent to hold up funding pending completion of the audit.
Based on the foregoing, the conclusion seems inescapable that the “count” referred to in the appropriations bill must be taken to mean the unaudited figures submitted by the public charter schools and DCPS.
The Control Board's insistence on withholding funding until completion of the audit has caused great hardship to the public charter schools, especially to those that opened for the first time in September. A number of these schools have run through their lines of credit and will not be able to make their next payroll.
Proof of Residency
Even if it were proper to withhold funding until completion of the audit, the auditor's demand that each charter school student produce three documents to prove his or her residency in the District is illegal and unreasonable.
The three document requirement is nowhere specified in the Funding Act or the School Reform Act. Rather, it is a regulation approved by the Control Board for the “District of Columbia Public School System.” As such, under the Reform Act it may not be applied to the public charter schools, even by the Control Board. Section 2204(c)(3)(B) of the Reform Act exempts public charter schools “from District of Columbia statutes, policies, rules, and regulations established for [DCPS] by the Superintendent, Board of Education, Mayor, District of Columbia Council, or Authority....”
This section is designed to preserve the independence of the public charter schools by preventing their re-regulation by DCPS or other governmental entities. [3] Therefore, the three document requirement, even if reasonable, should not have been imposed on the public charter schools.
But the requirement is not reasonable. Many of the students served by the public charter schools are among the most disadvantaged in the District. Many others are recent immigrants. The parents of these children often are not able to produce any of the required documents. Public charter school principals need the same flexibility that has been granted to the DCPS Residency Office, which may grant waivers to students who are unable to produce the necessary documents.
Recommendations
We recommend that the Control Board take the following steps:
1. Immediately fund the public charter schools -- at the levels required by the Funding Act -- based on the number of enrolled students they reported on September 15 or October 7. If remaining money in the set-aside is not sufficient to fully fund DCPS [4], encourage the District Council to pass a special appropriation.
2. Work with the public charter schools to develop reasonable procedures to ensure that public charter school students who enroll for school year 2000-2001 are District residents.
3. Take steps to ensure that the FY 2001 District budget provides full funding for the number of students who are likely to be attending the public charter schools and DCPS in school year 2000-2001.
We would be happy to work with you to ensure that the problems we are experiencing this year are not repeated.
Sincerely,
Robert I. Cane
Executive Director
[1] The DCPS Residency Office may waive the three document requirement if a home visit by a social worker or other processional establishes that the student lives in the District. Charter schools generally do not have such professionals on staff, but affidavits by charter school leaders following visits to students' homes have not been accepted by the auditors.
[2] Section 107 of the Funding Act, cited earlier, makes it likely that this requirement no longer applies to DCPS schools.
[3] Re-regulation has proven to be a serious problem for public charter schools elsewhere, and therefore this section is one of the most important of the Reform Act.
[4] Section 103 of the Funding Act specifies that the funding formula applies only to students resident in DCPS or the public charter schools. The formula does not apply to “students enrolled in private institutions providing special education services paid by the District of Columbia....”